Top management at Network Rail (NR) were “not tone deaf” to public concern at the company’s bonus scheme, the firm’s new chief executive told MPs.
But David Higgins added that NR, which paid its top bosses more than £2 million in bonuses in 2010, had to be a company “where we pay for performance”.
Transport Secretary Philip Hammond had questioned the appropriateness of the bonuses when they were announced last summer.
On Tuesday, former Olympic Delivery Authority (ODA) chief executive Mr Higgins, who took over from Iain Coucher, told the House of Commons Transport Committee that NR had already launched a review of its bonus scheme.
But he went on: “Performance management is absolutely essential to get an organisation to work (properly). There must be cause and effect, but there must be transparency. I am not tone deaf to public concern about bonuses and neither is our top management. But we do have to have a culture and environment where we pay for performance.”
Mr Higgins said that he had got a “very substantial bonus” when he was at the ODA and there had been “a lot of transparency” about it. He said it was important that it was “very, very clear” why bonuses were paid.
He also told MPs that some problems on the railways will never be fully solved and he accepted it was “more expensive to do things” on the railways in the UK than in Europe.
Mr Higgins said that £6 billion was needed over 15 years for the UK signalling system “to get us where the Europeans are today”.
Another problem was that NR had “a very limited time” to take over the track at weekends and holiday periods to do engineering work while in Europe these track “possessions” were for much longer periods.
Mr Higgins told MPs that one of the main London-to-Scotland routes – the West Coast Main Line – would be full in 10 years.